Permafrost-affected ecosystems are prone to warming and thawing, which can increase the availability of subsurface nitrogen (N) with consequences for otherwise N-limited tundra vegetation. Here, we show that the upper permafrost of the Tibetan Plateau is subject to thawing and that the upper permafrost zone is rich in ammonium. Furthermore, a five-year ¹⁵N tracer experiment showed that long-rooted plant species were able to utilize ¹⁵N-labeled N at the permafrost table and far below the main root zone. A 20 years survey is used here to document that long-rooted plant species had a competitive advantage at sites subject to warming and that both plant composition and growth were significantly correlated with permafrost thawing and changes in nitrogen availability. Our experiment documents a clear feedback mechanism of climate warming, which releases plant–available N favoring long-rooted plants and explains important changes in plant composition and growth across sites on the Tibetan Plateau.